I'm just starting out with my company, and I'm trying to figure out the best way to do some advertising with a low ad budget. ($100/month)

I'm considering offering a 10% discount off any hosting plan in exchange for a text link at the bottom of the person's site.

Any thoughts on if this would be a good idea or not?

For example, I was thinking of emailing several local businesses and offering them 10% discount if they would put a "Web Site Hosted By: mycompany.com" on the bottom of every page on their site.

What do you think? Is this worth the "money"? (It would cost me 10% lost.

Thanks!

Part of the reason why I'm considering this is because my understanding of search engines is that many of them are "link popularity" based. So if I can get my domain name on lots of sites, and then submit those sites to the engines.. my own hosting company website will rise in rankings.

Is this correct?

Yes - basically you are right.

You need to put your keywords in the actual text links. This is all primarily for Google - so at least make sure that you have Web Hosting in the link - something like "Web Hosting by ....." One downside is that all these sites will be off topic - but right now this won't be much of a downside - just get web hosting in the link text.

Also - another suggestion. Rather than just offer a straight 10% across the board - install the google task bar & check the site's PageRank. (It is the green meter in the center of the task bar). For sites that are < PR of 3 then offer less than 10%. For sites that are > 6 offer more. If you are lucky to be hosting sites that have PG of > 7 then offer then substantially more of an incentive.

Don't sweat about submitting their sites to the engines - Google will find the sites - the submission tool does nothing. You could submit to Altavista etc though.

Your idea is a good one - it will take a while to see the benefit - but it is definately worth it for you. Of course - when everybody does that - it just makes the keyword Web Hosting that much more competitive!!

It may well help you get ranked in search engines, but whether the 10% is worth it or not is dependant on the traffic it draws. 10% can add up over time. I would offer them a free service of 5%. At least until you see if it is a viable method of getting hits. Make sure that in your offer you write in the option of shutting down the offer, in case it doesn't work out as well as you thought it would. You don't want to be locked in to a 10% discount on 100s of sites with no way out if it bombs.

An excellant suggestion! I will definately have a written agreement with them, and I'll probably give them a "code" for the link so I can track click-throughs and resulting sales. Kind of like an affiliate program, but without the paycheck for them.

Thanks very much!

Tracking click throughs on the links is missing the point of the value of the links. You probably won't get many hits from the actual links themselves - not enough to payback your discount %(although you never know - you might).

But - search engine traffic can be incredible - there's not much chance of that without building links. In any one day there are at least 100,000 web hosting related searches across all the search engines. Building a good google page rank, and targeting some of the lessor keywords - could serve you well.

Just my opinion - but I think your original idea is a winner.

The original idea is a winner, but I agree with NovaW on this. Targeting webhosting you would be hard pressed to get even on the first ten pages of google. His suggestion that you target lesser used words is a great on. More and more internet users are not searching for general terms such as webhosting, because all they get are the big companies that can get links all over the web. They are using more and more defined terms. So in conclusion use webhosting but make sure it has otehr keywords in the links so that you will show up in more specialized searches. As you grow and if the program works your rank will improve, even on the "webhosting" search. One of the major problems is your are trying to ranked along with existing companies and it will be an uphill battle. I think 3 or 4 months would be a good test as 1 month would be way too short to yield accurate results.

I would try and get them to put your web-site on the bottom of a mailer or flyer with their web-site on it. In turn you could do a newsletter or something and give a link to their site. This would get a different type of audience to come to their site and then maybe to your site or vise-versa.